Iron Ore: The demand for restocking is stable, and the port inventory has begun to be destocked.
Logic and perspective:
Yesterday, the iron ore 2205 contract was affected by the epidemic and the external market, and closed at 673.5 yuan/ton, down 9 yuan/ton, or 1.32%. Qingdao Port PB fines reported 785 yuan/ton, an increase of 35 yuan/ton; SSF reported 485 yuan/ton, an increase of 5 yuan/ton; the spread between high and low-grade products was 300 yuan/ton. A total of 1 million tons of transactions were traded at the port yesterday.
According to Mysteel's statistics, the total inventory of 45 ports was 154.435 million tons, a decrease of 2.528 million tons from the previous month. Australia and Brazil shipped 25.773 million tons of iron ore, a month-on-month increase of 3.195 million tons. Australia’s total shipments amounted to 19.037 million tons, an increase of 1.443 million tons from the previous month. Among them, Australia sent 16.649 million tons to China, an increase of 2.566 million tons from the previous month. Brazil’s total shipments amounted to 6.736 million tons, an increase of 1.802 million tons from the previous month. The total global shipment volume was 32.064 million tons, a month-on-month increase of 3.195 million tons. Global shipments have returned to high levels.
On the whole, the supply and demand of iron ore have increased simultaneously, the shipments of foreign mines have returned to high levels, and the demand for winter storage of steel mills and restocking before the Spring Festival has stabilized. Although the national molten iron output temporarily remained low and only increased slightly from the previous month, the port inventory of iron ore began to fall from the previous month. Due to recent replenishment of stocks and long-term prospects for the resumption of production by steel mills, and long-term steel mill profits still exist, it is expected that iron ore will continue to fluctuate at high levels.
Unilateral: fluctuate at high levels
Spot-Futures Arbitrage: None
Concerns and risks:
1. Steel plant resumption of production and changes in profit
2. Iron ore shipment
Rubber: Demand worries, the trend of rubber prices weakened.
On December 20, the most-active RU contract closed at 14210 (-395) yuan/ton, the price of mixed rubber reported 12725 (-175) yuan/ton, and the basis of most-active contract stood at -835 yuan/ton (+45); the open interest of top 20 actively traded long positions was 103637 (+7288) lots, the short position was 154065 (+9417) lots, and the net short position was 50428 (+2129) lots.
On December 20, the most-active NR contract closed at 11065 (-175) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,730 (-25) US dollars/ton, the SMR stood at 1,725 (-20) US dollars/ton, and the SIR figure was 1,755 (-20) US dollars/ton. The basis of most-active contract reported -37 (+96) yuan/ton.
As of December 17: the total inventory of domestic exchanges was 221,350 (+5489) tons, and the amount of warehouse receipts of exchanges was 192,230 (+16720) tons.
Raw materials: Sheet rubber 54.52 (+4.02), cup lump 47.05 (-0.69), latex 51.2 (-1.3), RSS3 59.89 (+1.11).
As of December 16, the operating rate of domestic all-steel tire factories was 63% (-1.26%), and the operating rate of semi-steel tire factories was 64% (+0.23%).
Opinion: Crude oil prices fell sharply yesterday, which may be related to the epidemic at home and abroad, which directly affects the increase in concerns on the rubber demand side. At the same time, the recent continuous decline of synthetic rubber has also caused the premium of natural rubber to continue to increase. Worries about the anti-substitution of future demand and the depreciation of the Thai baht have jointly led to the weakening of rubber prices. At present, the non-standard rubber spread is still large, and the hedging pressure on the market has not yet eased. It is expected that short-term prices will remain weak.
Strategy: Neutrally bearish
1. Epidemic recurring
2. The spread between futures and spot prices continues to widen
3. Weak demand
Crude oil: The WHO says it is too early to conclude that Omi Keron is mild.
Oil prices fell sharply yesterday, and the WHO stated that it is too early to conclude that Omi Keron is a mildly mutated virus. With the increase in the number of cases of Omi Keron mutant infections, all health systems will be under pressure, which has increased market concerns about Omi Keron virus. Judging from the infection situation in the United States, Omi Keron's proportion of cases has increased rapidly. Even if the early infection is mild, once the number of infections increases beyond the capacity of the local medical system, it is not ruled out that major economies will restart social distancing measures. However, the recent news about Omi Keron is not completely bearish. Tests have shown that Moderna's booster shots can increase the antibody against Ome Keron by 36 times, but the uncertainty that Ome Keron brings to the market continues.
Risk: Geopolitical risk in the Middle East
Copper: LPR is slightly lowered, focusing on possible arbitrage opportunities in the internal and external markets.
On the macro level, the LPR was lowered to 3.80% from the previous 3.85% yesterday, which shows that China’s monetary policy is quite different from the gradual tightening overseas. This may create certain opportunities for cross-market arbitrage of domestic and foreign markets in the future. However, it can be found that the U.S. dollar index and U.S. Treasury yields do not seem to show any significant gains after the hawkish Fed meeting last week. This may reflect that there is still a greater wait-and-see sentiment in the market at the moment.
Fundamentally, interference from domestic and foreign mines continues. Las Bambas copper mine agreement is difficult to reach, announced within the week to stop production until this Saturday. The transportation of copper concentrate at Erlian Port in China continued to be suspended due to the epidemic, and it is currently planned to resume next week. The TC index declined for two consecutive weeks. On the consumer side, the new year's close, the interference of the epidemic, and the rebound of copper prices at the end of the week have led to weaker copper terminal consumer demand. As the price of copper fell from the previous period, the price difference between refined copper and copper scrap continued to stay below the reasonable price difference, supporting the price of copper. In terms of inventory, LME accumulates inventory weekly, but the Shanghai Futures Exchange destocks this week. At the same time, both domestic social treasury and bonded zone inventories are destocked, and it seems that the turning point of inventory has not yet appeared. On the whole, as the Fed’s interest rate hike is digested by the market, the market will face continuous disturbances on the supply side and seasonal weakness on the demand side. The price of copper will continue to fluctuate before the inflection point of inventory appears.
1. Unilateral: Neutral
2. Inter-market: postpone
3. Inter-period: postpone
4. Options: postpone
1. The Fed's monetary policy orientation
2. The trend of the US dollar index
3. The risk of the epidemic may increase.
PTA: Crude oil drove the fall of PTA.
1. The load increase of Zhejiang Petrochemical is still slow.
(1) The PX 9 million tons production line of Zhejiang Petrochemical Company increased the load to 65% to 70%, and the rate was still slow. Zhenhai Petrochemical is currently operating normally, and attention needs to be paid to potential future impacts. Under the background that Zhejiang Petrochemical is under full load, the accumulation rate of Asian PX inventory in December-January is still slow, and PX processing fees are expected to be compressed.
2. PTA partly increases production load.
(1) Last week, Yisheng New Material's 3.6 million tons capacity device still maintained a low load at 60%, and the load will be gradually increased this week. Yisheng Dahua's 6 million tons production capacity was temporarily stopped last Friday, and the load will remain low this week.
3. The terminal load is under pressure.
(1) Under the background of the Shaoxing epidemic, combined with local environmental inspections and insufficient orders, the operating rate of weaving in Jiangsu and Zhejiang was relatively low.
(2) Pay attention to the subsequent production reduction plan of the polyester plant.
Balance sheet outlook: It is expected that polyester will reduce production load due to terminal load reduction. Under the background of the full implementation of the PTA factory overhaul, it is expected that the inventory will be slightly destocked in December, but it will enter the seasonal accumulation of inventory in January.
(1) Unilateral: Cautiously bearish; The PTA processing fee has fallen from the high level and is expected to undergo range consolidation afterwards. PX Zhejiang Petrochemical's new production capacity has also suppressed processing fees to a low level, and crude oil benchmarks have fallen.
(2) Intertemporal: take a wait-and-see attitude.
Risks: The price of crude oil fluctuates sharply; PTA plant maintenance progress; Zhejiang Petrochemical PX new plant production load increase progress; polyester plant joint production reduction progress.
基本面来看，国内外矿端干扰持续，Las Bambas铜矿协议难达成，周内宣布停产至本周六。国内二连口岸受疫情影响铜精矿运输持续暂停，目前计划下周恢复。TC指数连续两周下行。2022年铜精矿长单加工费Bench mark敲定为65美元/吨，较2021年上涨5.5美元/吨，涨幅不及市场预期，隐含买卖双方对2022年供给扰动仍有所担忧。消费端来看，年关将至以及疫情干扰，加持周尾铜价反弹等因素，铜终端消费需求转淡。随着铜价由前期回落，精废价差持续位于合理价差下方。对铜价形成支撑。库存方面，LME周度累库，但上期所本周去库，同时国内社库及保税区库存均去库，库存拐点目前看来仍未出现。整体来看，伴随美联储加息利空情绪被市场消化，后续将面临供应端的持续扰动以及需求端的季节性走弱。库存拐点尚未出现之前，铜价将持续震荡。
1. 单边：中性 2. 跨市：内外反套 3. 跨期：暂缓；4. 期权：暂缓
1. 美联储货币政策导向 2.美元指数走势 3.疫情风险加剧